NAIFA Applauds House, Senate Conferees on Approach to Standard of Care Issue
FALLS CHURCH, VA (June 24, 2010) — The National Association of Insurance and Financial Advisors’ (NAIFA) President Thomas D. Currey, CLU, ChFC, LUTCF, issued the following statement after the House and Senate conferees announced their decision to allow the Securities and Exchange Commission to move forward on a study that will address the standard of care issue:
“NAIFA strongly supports the House and Senate conferees for retaining this important study of how the differing regulations for broker-dealers and investment advisors are applied, and we commend Sens. Johnson and Crapo for their leadership on this issue. The results of the study will advance our understanding on how the suitability standard governing broker-dealers and their registered representatives is applied and enforced relative to the fiduciary duty governing investment advisers.
“The SEC study contained in the Senate language would have required the SEC to write rules — based on findings from the study — that would address gaps in investor protections. We believe that is the right approach to take.
“We are disappointed with the decision to allow the SEC to put in place a ‘best interest’ standard that will not tie directly to findings from the study. However, we support the House efforts to ensure that the ‘best interest’ standard recognizes that no broker-dealer and their registered representatives can violate the standard simply because they receive commissions and sell proprietary products.”
About NAIFA: NAIFA comprises more than 700 state and local associations representing the interests of approximately 200,000 agents and their associates nationwide. NAIFA members focus their practices on one or more of the following: life insurance and annuities, health insurance and employee benefits, multiline, and financial advising and investments. The Association’s mission is to advocate for a positive legislative and regulatory environment, enhance business and professional skills, and promote the ethical conduct of its members.